There were lots of questions occupying the minds of those attending Renewable UK’s Global Offshore Wind in London. Two of these are were:
- What will the UK Government’s Sector Deal mean for me?
- How might governments ration capacity in a post-subsidy world?
Happily, the answers to these questions could have a lot in common. In a subsidised world, auctions are essentially decided on price, provided developers meet deliverability criteria. In the UK, there are supply chain plans that act as a gateway into CfD allocation rounds but they do not play a role in the auction process.
If price ceases to be a differentiating factor, where will the Government’s gaze shift? The Government will probably conclude that the objectives of its industrial strategy are high priority. These are enshrined in the five pillars of Ideas, People, Infrastructure, Business Environment and Places. For offshore wind, the highlights are 2030 targets for UK content (60%) and improving the gender balance in the industry.
This is a clear statement of what the Government wants from the industry. In allocating future capacity, it seems obvious that it will wish to ration developers on how well they contribute to the Sector Deal targets.
An option is to require supply chain plans for future wind farms but rework them so they explicitly incentivise progress towards the Sector Deal targets and require a formal assessment of that progress being delivered. But, let’s be honest: while supply chain plans have been an important discipline for developers, if they are to have any teeth and give us any hope of meeting Sector Deal targets, they will need to move centre stage and become a key part of the allocation process.
